Apple and the Tech Stocks Slide Lower

The tech stocks gave back most of yesterdayis bounce but the Dow continued higher on news that manufacturing growth remains restrained thus lowering the chance of a Fed interest rate hike later this month. Apple settled lower today.

Apple sank 1 1/2 to close at 49 5/16 on low volume of 2.4 million shares. Appleis stock has been trading choppy and trendless since July 24th.

The Nasdaq fell 82 points (-2.16%) to closed at 3685 on low volume of 1.3 billion shares. Semiconductor stocks, off 3% today, are down 24% from July 15th. The number of 52-week lows are increasing on the Nasdaq.

The Dow rallied 85 points (0.81%) to close at 10607 on volume of 919 million shares.

The Dow Utility Index (DJU) hit a new all time high today, but the high isnit as clearly a signal of investors running for cover as it use to be, since the DJU now contains many high tech fiber optics and natural gas trading businesses which defy good oli dadis definition of a utility. Furthermore, in the US, demand for electricity is outstripping supply in many regions giving many utilities strong growth prospects going forward.

The S&P 500 climbed 7.26 points (0.51%) to close at 1438.09.

In Apple related businesses: Adobe fell 1/16 to 114 7/16.

Motorola gained 1 3/4 to 35 dollars after the company, in a meeting with analysts, revealed that it is aiming to increase its profit margin to double digits by the fourth quarter.

Dell fell 2 3/8 to 41 9/16. thestreet.com reported, "Trading desks were awash in a range of rumors, but the spark for todayis declines seems to have come from a terse note Bear Stearns PC analyst Andy Neff sent to internal staff around 1 p.m. EDT. Neff wrote that "thereis a good chance" the companyis revenue could come in below the forecast $7.83 billion. "It could be closer to $7.7 billion," he wrote. But Neff added that better-than-expected margins should allow Dell to meet earnings-per-share expectations."

Gateway lost 1 1/16 to 54 1/8. Gatewayis CEO, Jeff Weitzen, announced a $100 million initiative to train end users to use PCs. The company, saddled with the user unfriendly Windows operating system, apparently believes contorting the end user to fit the OS is easier than modifying the OS to the end user. Go figure.

In economic news: The National Association of Purchasing Management reported that its manufacturing index stayed flat in July at 51.8. Any reading above 50 indicates an economic expansion, while readings below 50 indicate a slowing economy. The index started the year at above 56 and has steadily trended lower until the sideways reading this month.

The Commerce Department reported that construction spending dropped 1.7% in June. Fed Chairman, Alan Greenspan, is believed to follow construction spending as a leading indicator of economic activity.

Meanwhile, US consumers show little sign of slowing their consumption. According to the Wall Street Journal, "American consumers are reaching for the gas pedal once again, which could revive inflationary pressures. The 0.5% rebound in consumer spending outstripped American, workersi gain in income, which rose 0.4% in June, a slight improvement from a 0.3% advance in May."

For full quotes on all the companies mentioned in this article, we have assembled this set of quotes at Yahoo! for your reference. For other stories regarding Appleis stock activity, visit our Apple Stock Watch Special Report.